PYPL in value territory
Here we have Paypal on linear scale, multi month bullish divergence forming inside a falling wedge. As a contrarian, I like this setup.
Interestingly, the RSI is soon going to backtest the neckline of an inverse head and shoulder pattern coming in at 24.90% level in the oversold area on the weekly timeframe. Should this be backtested as support, I believe Paypal stock will try to breakout of this falling wedge.
As you can see, price is making lower highs and lower lows, while the RSI is making higher highs which could indicate accumulation taking place.
Keep in mind there is a gap at the 44$ level, and this is also the 0.618 golden pocket level on my chart so obviously this could act as a magnet, but not every gap gets filled. This company is now trading at 2017 valuation while its fundamentals have greatly improved (about a 3x by most metrics) since then.
I started nibbling on some spot shares recently, and I will continue to average down in the next few months. Catching a falling knife is never easy, dollar cost averaging is the best strategy to reduce risk when doing so. I would not advise using leverage for such high risk high reward plays.
Interestingly, the RSI is soon going to backtest the neckline of an inverse head and shoulder pattern coming in at 24.90% level in the oversold area on the weekly timeframe. Should this be backtested as support, I believe Paypal stock will try to breakout of this falling wedge.
As you can see, price is making lower highs and lower lows, while the RSI is making higher highs which could indicate accumulation taking place.
Keep in mind there is a gap at the 44$ level, and this is also the 0.618 golden pocket level on my chart so obviously this could act as a magnet, but not every gap gets filled. This company is now trading at 2017 valuation while its fundamentals have greatly improved (about a 3x by most metrics) since then.
I started nibbling on some spot shares recently, and I will continue to average down in the next few months. Catching a falling knife is never easy, dollar cost averaging is the best strategy to reduce risk when doing so. I would not advise using leverage for such high risk high reward plays.
Note
I will be holding these shares and probably keep adding if the stock goes back down to 66$.
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